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Quarterly Report On Consolidated Results For The Financial Period Ended 31/05/2018

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Unaudited Condensed Consolidated Statements Of Comprehensive Income
For The Quarter Ended 31 May 2018

Income Statement

Unaudited Condensed Consolidated Statements Of Financial Position
As Of 31 May 2018

Balance Sheet

Review of Performance

The Group registered an increase in revenue for both quarter as well as year to date. This is mainly coming from the higher volume of sales from the agricultural components as well as TV back chassis. Despite the increase in revenue, the decrease in operating profits was mainly due unrealized foreign exchange losses, higher operating costs as well as no engagements in Engineering, Procurement, Construction and Commissioning ("EPCC") projects. Below is the breakdown based on our main operating segments:

Precision stamping & tooling segment

The precision and stamping and tooling segment recorded a marginal increase in sales for Q3 FY2018 of 5%, however, it recorded a 27% increase on a year to date basis. Significant contributions in higher volume from the agricultural segment and industrial fan products had boosted the revenue growth for this segment. In addition, the TV back chassis demand continues to be strong for the 9 months ended 31.05.2018

For current quarter 3 FY2018, despite the marginal increase in revenue, operating profit declined due to higher labour cost from the foreign workers levy. Furthermore, raw material prices have increased gradually and the Company intends to transfer this increase to customer.

Printed circuit board ("PCB") & module assembly segment

The PCB segment recorded a slight decrease in revenue in the current period, however, overall 9 months revenue have increased by 17%. This is mainly due the increase in volume for home shower from one of our main customer. Included under the 3rd Quarter operating loss and year to date operating loss are unrealized forex exchange loss of RM45k and RM418k respectively. Without this unrealized forex loss, the operating loss would have been reduced to RM279k in Q3 FY2018 and RM777k in YTD FY2018 respectively.

In addition, the PCB segment also incurred additional operating costs due to the foreign worker levy.

Renewable energy

The renewable energy segment in the current quarter and year to date shows an operating loss as there was no major Engineering, Procurement, Construction and Commissioning ("EPCC") engagement in derived from the trading of green equipment and supply of electricity from our solar farm.

Current Year Prospects

The Board foresees the current year's prospect to be challenging due to the uncertain global economics environment which includes the fluctuation of Ringgit / USD foreign exchange rate and the expected rising of local operating cost. In addition, the proposed increase in minimum wage will impact manufacturers who are labor intensive. In view of that, the Company is always seeking new technology and machineries to be more efficient in its processes and optimize the labour headcount.

Despite the challenging business environment, the Group will continue its effort in promoting the EMS (Electronic Manufacturing Services) business, solar energy business, property development business and to widen its customer base. Under the renewable energy segment, despite the stiff competition, the Group has managed to secure a contract to build a solar system in Selangor and construction is expected to be completed in the coming months.

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